UNEXPECTED DIP
While the number and value of new mortgages approved last week were within the recent tight ranges, the average approval amount was not, falling quite noticeably. Borrowers are being approved for the same number of loans, but the amount is lower. It is not clear whether this is just a one-off dip, or the start of a trend.

A MAJOR MILESTONE
Not only is ACC reducing its ‘premiums’, it has also finally built enough provisions to cover its expected actuarial liabilities. It is a significant milestone with the Scheme reaching full funding in 2014/15. It has taken 41 years to get on top of their unfunded liabilities. (Now the only major unfunded Government liability is New Zealand Superannuation – and that one is unfunded to the tune of some $325 bln (after deducting the NZ Super Fund, and the value of KiwiSaver). The GSF also has unfunded liabilities of some $10 bln. At least it is good to get the ACC one sorted.)

RENTS UNCHANGED
The September data from the MED Tenancy Bond Service for September shows no changes in median rents for last month. Rents for 3 br Auckland houses slipped marginally to $590 per week, as did rents for 2 br flats ($412/week). There were also only tiny shifts in Wellington and Christchurch for similar accommodation.

NEW UNION BORN
New Zealand has a new union. E tū has been formed through the merger of the Engineering, Printing and Manufacturing Union and Service and Food Workers’ Union. E tū says it represents more than 50,000 people working in the likes of the aviation, construction, journalism, food manufacturing, mining and cleaning sectors. Bill Newson, E tū national secretary, said all workers not in a union should take notice, with E tū here to help them achieve higher wages, better conditions and fair employment laws.

TWICE AS BIG AS THE CHINA FTA
Here is a useful perspective from Westpac’s senior economist Michael Gordon of the TPP: “while the degree of access for dairy exports is disappointing, we shouldn’t lose sight of the fact that the agreement as a whole provides significant tariff savings for New Zealand’s exports – estimated at $259 mln a year, compared to $115 mln a year in the New Zealand-China Free Trade Agreement. Moreover, the experience of the China FTA shows that the gains overwhelmingly come from increased trade volumes. It’s up to New Zealand’s exporters to capitalise on the opportunities created by the TPP – which is why it’s so hard to quantify the benefits in advance.”

WHOLESALE RATES
Despite small rises on Wall Street overnight and the stronger dairy prices, wholesale swap rates are all unchanged today, as is the 90 day bank bill rate, holding at 2.83%.

NZ DOLLAR HIGHER
The Kiwi dollar has moved higher again today. A weaker USD and better dairy prices are behind the moves. It is currently at 65.6 USc, 91.4 AUc and 58.2 euro cents. The TWI-5 is now at 70 again. Check our real-time charts here

You can now see an animation of this chart. Click on it, or click here.